Housebuilding jobs to go as credit crunch bites

Jun 4 2008 by Chris Knox, The Journal

THE CRISIS hitting the region’s house builders sector has gathered pace with four major firms looking to shed jobs in order to survive the credit crunch.

Statements from Haslam Homes, Gladedale Homes, McInerney Homes and Persimmon Homes warn of the possibility of hundreds of job losses in the region over the coming months.

York-based Persimmon Homes is reviewing its 1,000 North East employees after it saw house sales drop by 24% since the start of the year.

It has already said it will not be building any new houses in addition to its 34 current developments in the region until the market improves.

David Jenkinson, regional chairman at the firm, said: “Regrettably, a number of redundancies are to be made and members of staff in the region have entered into a consultation process.”

The grim picture is echoed by Surrey-based Gladedale Homes and Irish firm McInerney Homes, with both confirming that they are looking to make a number of job cuts.

The firms employ around 240 staff between them in the North East and have both been badly affected by tighter trading conditions in the mortgage market.

A spokesman for McInerney said: “As a consequence of the global credit crunch and cautious consumer sentiment, McInerney is currently facing challenging conditions. The supply of new mortgage funding for potential home purchasers has been significantly curtailed during the past month which has impacted on demand for new homes and therefore construction output. The company’s aim is to achieve redundancies through a voluntary process where possible.”

Affordable housing group Haslam Homes, which is based in Doncaster and has a branch in Gateshead, also expects to axe around 20 of its 120 employees in the North East. However the firm remains optimistic of its future in the region, where it currently has 16 sites in development.

It said: “The challenging housing market we are facing at present means that we need to reduce our operating costs significantly and this will regrettably mean redundancies.

“Behind the headlines there continues to be a growing need for housing, particularly at the starter end of the market, which will ultimately drive a recovery.”

The statements illustrate a worrying trend for the sector and follow the decision by the UK’s largest housebuilder Taylor Wimpey to axe 10% of its UK-wide workforce of 4,700.

A spokesman for the Home Builders Federation, which is currently calling on the Government to address the speed of job losses in the sector, said: “It’s not surprising more firms are looking to cut their costs by getting rid of staff. As more people get knocked back for a mortgage, we will see the situation get even worse. If action is not taken quickly, in addition to the immediate threat to jobs, the Government will fail to meet its long-term housing targets by some margin.”